Architecture Overview

Shroud Network consists of three layers that work together to provide privacy.

System layers

┌──────────────────────────────────────────────────────────┐
│  Client SDK (TypeScript)                                 │
│  Note management, proof generation, encrypted memos      │
├──────────────────────────────────────────────────────────┤
│  ZK Circuits (Circom 2.x)                                │
│  Transfer circuit, withdraw circuit, Groth16 proofs      │
├──────────────────────────────────────────────────────────┤
│  Smart Contracts (Solidity/EVM)                          │
│  ShieldedPool, Merkle tree, nullifier registry, verifier │
└──────────────────────────────────────────────────────────┘
                        │
                  Avalanche C-Chain

1. Smart Contracts

On-chain logic that manages the shielded pool:

• ShieldedPool — deposits, transfers, withdrawals, commitment Merkle tree, nullifier registry
• Groth16Verifier — verifies ZK proofs on-chain using BN254 precompiles
• MetaTxRelayer — gasless deposits and withdrawals via EIP-712 signed meta-transactions
• Poseidon — on-chain hash function matching circuit parameters

2. ZK Circuits

Circom 2.x circuits define what the prover demonstrates:

• PrivateTransfer — proves a valid transfer without revealing amounts or parties (~25K constraints)
• PrivateWithdraw — proves a valid withdrawal without linking to the depositor (~21K constraints)

3. Client SDK

TypeScript library that runs in the browser:

• Baby Jubjub keypair management
• Note creation, encryption, and local storage
• Merkle tree synchronization from on-chain events
• Groth16 proof generation via snarkjs (WASM)
• Transaction construction and relay integration

Data flow

Deposit

User → approve ERC20 → deposit(amount, commitment) → Merkle tree updated

Private transfer

User → generate proof locally → submit(proof, nullifier, 2 new commitments) → verify on-chain

Withdrawal

User → generate proof locally → submit(proof, nullifier, amount, recipient) → ERC20 released

Privacy model

What's private	What's public
Transfer amounts	Deposit amounts (ERC20 transfer is visible)
Sender identity	Withdrawal amounts (ERC20 release is visible)
Receiver identity	Total pool balance
Account balances	Number of commitments in the tree
Transfer graph	Nullifiers (but unlinkable to notes without the secret)